Remember in 2008-9 when a young investor started a thread here? Something like, "This twentysomething is VERY excited about the downturn." Very understandable, but she was roundly lambasted by all the people in or nearing retirement. Also understandable.

bogleheads, don't knock state lotteries. They helped defund the mafia.

I pulled the trigger on a big 5 year 3.55% brokered CD today because I have a lot of 5 year CDs coming due in the next 2 months and would hate to see the rates go down again due to a prolonged market slump. I have a 5 year ladder, but it became unbalanced when the best rates available were 3 year rates three years ago. Like many I was waiting for 4% CDs from non-pain-in-the-neck institutions to show up, but they haven't. So I am completing my 2023 rung.

I also tax loss harvested the rest of my taxable 2018 stock investments from 2018 all of which are in the red but am holding off reinvesting the proceeds immediately.

I don't like what I'm seeing in the rising cost of raw materials due to the Trump tariffs. They impact our business and we are seeing manufacturing costs rising there. I don't like the current out-of-control state of corporate debt or the way that fears about that debt being difficult to recapitalize appears to be limiting what the Fed can do in terms of raising rates to levels more in line with how rates have behaved for the last 400 years. Most importantly, I don't like the lack of innovation and growing stagnancy of the big companies that dominate the large cap indexes. When Apple or Amazon sneeze a lot of small and mid caps will get colds.

Capital preservation is my goal and I'd rather lose 1% of the money that is to get me through the rest of my life to inflation this year than lose 25% or it to things going on behind the scenes in the stock market now that we will only learn about after our money is gone.

I had a good chunk of my money in CDs in 2008 and was one of the few people in my circle who was sleeping well. At this point in my life--my 70s--I am willing to give up possible gains to avoid possible losses.

Sequence of risk returns is something that can seriously derail the best laid retirement plans and is a real risk.

That’s why I’ve had a rolling five year CD ladder (but recently the last two years “legs” are in the shorter duration since longer didn’t give us the yield), and an allocation of 45/55 to be able to SWAN. (our WR this year is below 1% and never got to 2% yet; and we have plenty of fixed income for decades). It also helps to have a pension (fewer have them now, I realize, but it was at a serious cost in salary during the working years) and realize that, if we really did need more, that I could start SS.
Our last purchases were CD’s and short term treasuries.

No, not excited to lose money. I get excited when I make money. Sometimes I think these type of posts greatly underestimate the potential risk out there. The past down turns and very fast recoveries have spoiled current investors. If you look at what happened in the Great Depression and still get excited then you might want to seek mental help. How about the market could lose 80% and not recover for a decade. Does that make you excited?

I can’t help it, but when I read headlines such as “worst market to invest since the 1970s as almost all markets decline” or worst quarter in 7 years etc, I view that as positive news for a long term investor. I’m nowhere near retirement, so a year like this year simply means I can invest at lower levels. Maybe I’m just wired differently, but I get nervous when all asset classes just keep going up...

I don’t want to minimize the pain of losses, and as the 2008 crisis taught me there is a risk of investing / rebalancing too early and too quickly in sharp downturns.

You are making the implicit assumption that the *VALUE* of the thing you are buying (a broad basket of stocks) hasn't changed and only the *PRICE* has gone down. This implies that you are getting a bargain relative to purchasing the stocks a few months back.

Consider, instead, the possibility that both (a) the price has dropped because (b) the value has dropped.

If you were thinking about purchasing a building and noticed that (a) it had become cheaper and (b) had also burned to the ground, you wouldn't immediately think, "I can invest at a lower level!"

Stock prices bounce around because of noise and animal spirits, but also because things fundamentally change. The market might be down because it REALLY IS LESS VALUABLE! In which case this is not "positive news for a long term investor."

Last edited by MarkRoulo on Thu Dec 06, 2018 1:18 pm, edited 1 time in total.

No, not excited to lose money. I get excited when I make money. Sometimes I think these type of posts greatly underestimate the potential risk out there. The past down turns and very fast recoveries have spoiled current investors. If you look at what happened in the Great Depression and still get excited then you might want to seek mental help. How about the market could lose 80% and not recover for a decade. Does that make you excited?

I agree. It’s easy to “whistle past the graveyard” if you don’t have much regard for history or your fellow man.

Okay, I get it; I won't be political or controversial. The Earth is flat.

I counted about 10 separate days in 2018 that one could have bought VTI at current prices. I don't remember being particularly excited to buy at any of those times.

Now, if we could see some prices that haven't been touched since 2015...

OP, I occasionally get excited, and then I have realizations similar to tea_pirate. I had one of these on Tuesday when I was all, "hey, massive market drop, I can probably TLH" and then saw I was still several percent above the cost-basis from my last harvest.

Folk's overconfidence or lack of insight or both of their job security in a bear market is truly outstanding. Unless your a doctor married to a doctor (which I am) I would not be so confident you will have a job if/ when the market continues to go south. Many folks would LOVED to have bought in 2008, but couldn't as they found out soon enough they are not that valuable as an employee.

Good luck.

"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” |
-Jack Bogle

Thanks, my point was if posters would take the few extra seconds to type fund nsmes rather than symbols it would save time cumulatively for multiple readers who do not have to look them up. Their often helpful posts would also be more impactful for newer members and those of us that skip over posts with just symbols.

Thanks, my point was if posters would take the few extra seconds to type fund names rather than symbols it would save time cumulatively for multiple readers who do not have to look them up. Their often helpful posts would also be more impactful for newer members and those of us that skip over posts with just symbols.

No, not excited to lose money. I get excited when I make money. Sometimes I think these type of posts greatly underestimate the potential risk out there. The past down turns and very fast recoveries have spoiled current investors. If you look at what happened in the Great Depression and still get excited then you might want to seek mental help. How about the market could lose 80% and not recover for a decade. Does that make you excited?

No, not excited to lose money. I get excited when I make money. Sometimes I think these type of posts greatly underestimate the potential risk out there. The past down turns and very fast recoveries have spoiled current investors. If you look at what happened in the Great Depression and still get excited then you might want to seek mental help. How about the market could lose 80% and not recover for a decade. Does that make you excited?

No, not excited to lose money. I get excited when I make money. Sometimes I think these type of posts greatly underestimate the potential risk out there. The past down turns and very fast recoveries have spoiled current investors. If you look at what happened in the Great Depression and still get excited then you might want to seek mental help. How about the market could lose 80% and not recover for a decade. Does that make you excited?

That would actually work in my favor. Strange how that works.

How do you know it would work in your favor? I'm assuming you think that you would be able to buy at the bottom but that assumes you have money to invest. Very few jobs are so secure that you are assured you have income to invest at the bottom.

Thanks, my point was if posters would take the few extra seconds to type fund nsmes rather than symbols it would save time cumulatively for multiple readers who do not have to look them up. Their often helpful posts would also be more impactful for newer members and those of us that skip over posts with just symbols.

That may have been your intended point but that's not how it came across to me this time or the previous times you've said something like this. If you want a new poster to understand what you want it would be helpful to explain fully to them why it's important to use fund names and not just ticker symbols. Each time it happens.

But I will point out that VTI is the ticker for the ETF version of Vanguard's Total Stock Market Index Fund, which probably is the single fund most often owned by members of this forum. So, if turnabout is fair play, I suggest you learn that ticker symbol.

One of the best insights I ever read in this forum from doc, went something like this:

Novice investors have a hard time staying the course when the market is declining.

Intermediate investors have a hard time staying the course when the market is advancing.

Advanced investors stay the course, no matter what.

If you're an advanced investor, there's nothing to get excited about.

I think based on this I am a lazy novice. I am having a hard time wanting to stay the course (part of me want to "get out") but I don't feel like going though all the trouble of selling and all that headache.

Okay, half joking there. I want to get out, but I won't because I know it's better to stay the course. I am conflicted but at least discipline usually wins out over emotion with me.

As to memories of 2008. I lost my job back then due to budget cuts where I worked. It stank. Then because my husband left me (divorce) I had to sell and upside down house because I couldn't afford the house on one salary (no salary eventually... my employer gave me 3 months notice they were cutting my job). That stank too. And the divorce, my ex's per-leaving me spending, and lawyer bills put me in a lot of debt. Again, that stank. Recovering from all that was very lean times for me and my daughter. I have a couple of decades before I retire, so I should be good investment-wise, but I really, really don't want to go back to those times--especially when thinking about my daughter going to college in a few years. I am hoping this downturn is short lived (or at least, not a full blown recession like 2008).

No, not excited to lose money. I get excited when I make money. Sometimes I think these type of posts greatly underestimate the potential risk out there. The past down turns and very fast recoveries have spoiled current investors. If you look at what happened in the Great Depression and still get excited then you might want to seek mental help. How about the market could lose 80% and not recover for a decade. Does that make you excited?

That would actually work in my favor. Strange how that works.

How do you know it would work in your favor? I'm assuming you think that you would be able to buy at the bottom but that assumes you have money to invest. Very few jobs are so secure that you are assured you have income to invest at the bottom.

No, not excited to lose money. I get excited when I make money. Sometimes I think these type of posts greatly underestimate the potential risk out there. The past down turns and very fast recoveries have spoiled current investors. If you look at what happened in the Great Depression and still get excited then you might want to seek mental help. How about the market could lose 80% and not recover for a decade. Does that make you excited?

That would actually work in my favor. Strange how that works.

Would it work in the favor of your older loved ones/family?

"If" history repeats itself given the average time it takes for markets to recover they would be ok.

Of course we don't know the future, if so we'd be living on private islands with umbrella drinks in our hands.

I can’t help it, but when I read headlines such as “worst market to invest since the 1970s as almost all markets decline” or worst quarter in 7 years etc, I view that as positive news for a long term investor. I’m nowhere near retirement, so a year like this year simply means I can invest at lower levels. Maybe I’m just wired differently, but I get nervous when all asset classes just keep going up...

I don’t want to minimize the pain of losses, and as the 2008 crisis taught me there is a risk of investing / rebalancing too early and too quickly in sharp downturns.

Excited like a gambler gets when he puts it all on red?

You know there is no guarantee that the market will return to its peak within your lifetime, right?

Guarantee, no of course not. But if you read any of the Bogleheads literature and understand the math, believe in the economy of the US, and have a plan you are sticking to, then you know that markets are efficient, and most likely will continue to rise in the future.

Being in a position to weather the storm and capitalize on that are the variables that change for the individual, via their exposure (AA) and timeframe

I'm very curious about this literature, particularly the one involving math, that says that most likely the markets will continue to rise into the future. Also about the one that says that markets being efficient has anything to do with their likelihood of continuing to rise into the future. I'd appreciate some sources.

I suppose the fact that Japan's stock market flatlined for many years, and many who were invested at the peak did not live to see another peak within their lifetimes, proves that markets are NOT efficient. I sense a great econ publication in the making.

No, not excited to lose money. I get excited when I make money. Sometimes I think these type of posts greatly underestimate the potential risk out there. The past down turns and very fast recoveries have spoiled current investors. If you look at what happened in the Great Depression and still get excited then you might want to seek mental help. How about the market could lose 80% and not recover for a decade. Does that make you excited?

Lots of responses, so it looks like my provocative title hit a nerve. Let me just clarify a few things: It‘s interesting how many posters evoke the memories of the Great Recession of 2008. Personally I think that it is highly unlikely that we will see anything similar to that anytime soon; if I remember correctly 2008 was the deepest recession since the Great Depression. It‘s understandable that people immediately think of 2008 when stocks go down, but again I think that‘s a great example of recency bias.

I am certainly not excited should the country slip into a deep recession, all I was saying that accumulating investors should be thankful for lower prices (if I remember correctly Bernstein was saying how investors should pray for a prolonged bear market during their investing life’s, so they can accumulate shares cheaply). I am a little surprised how strongly people seem to feel about their „losses“, surely nobody could expect the low volatiltiy / steady increase days of 2017 would continue indefinitely.

Folk's overconfidence or lack of insight or both of their job security in a bear market is truly outstanding. Unless your a doctor married to a doctor (which I am) I would not be so confident you will have a job if/ when the market continues to go south. Many folks would LOVED to have bought in 2008, but couldn't as they found out soon enough they are not that valuable as an employee.

Personally I think that it is highly unlikely that we will see anything similar to that anytime soon; if I remember correctly 2008 was the deepest recession since the Great Depression. It‘s understandable that people immediately think of 2008 when stocks go down, but again I think that‘s a great example of recency bias.

Anything could happen. Since the bottom of the recession interest rates have never been high.

It's very possible the we were headed for a depression in 2008 and the printing of money delayed that for ten years. It could now be time to Pay the Piper. Depression time.

But it doesn't really matter to a boglehead, as we buy every week regardless, so long as we have income. To an advanced investor, every day is an equally good day to buy.

I'm in withdrawal mode via required minimum distributions (RMD's) in my 401k. All the money that I'm expecting to take as a distribution over the next 24 months is in cash -- money market. It has risk of diminishing due to inflation, but I will meet my required distributions, without having to sell any other holdings. Of course that reserve isn't gaining in value, especially not against inflation. But I can watch and adjust the rest of my portfolio separately from taking required distributions.

Folk's overconfidence or lack of insight or both of their job security in a bear market is truly outstanding. Unless your a doctor married to a doctor (which I am) I would not be so confident you will have a job if/ when the market continues to go south. Many folks would LOVED to have bought in 2008, but couldn't as they found out soon enough they are not that valuable as an employee.

Yawn..... A little positive side of zero for the year. Not very exciting (in my book) as a retiree. Birthday this month, seems Decembers are coming faster than they used too. ... that's not very exciting either. Leaving for a three week cruise soon, that's exciting.

plus 1 (except for the retirement part). My family and I can't wait to be in the warmth! Enjoy your cruise

But it doesn't really matter to a boglehead, as we buy every week regardless, so long as we have income. To an advanced investor, every day is an equally good day to buy.

It doesn't matter to a young, working Boglehead. But a lot of older people have been lulled into maintaining very stock heavy portfolios due to the extremely low yields available in less speculative investments. For people who don't have any more money coming in to invest, who are removing money from their accounts every month to supplement Social Security, it's a different matter.

One thing I've noticed a lot on several different investing forums is how many older, retired people who give investing advice online have cushy pensions. That pension is very much like a salary and not subject to market fluctuations. But for many if not most of us who are perhaps just 10 years younger, there are no pensions. Our companies fired us before we vested back in the late 1980s, or switched us to 401K plans, or we ended up working as contractors or being otherwise self-employed. This group, which is mostly in it's 50s and 60s now are far more at risk if the market tanks and stays tanked than are the people with those pensions. If there is a prolonged recession that is not turned around by Fed manipulations, those people will be in very serious trouble.

To say nothing of all the elderly people with trivial savings who are still working into their 70s and beyond because they have no choice. A severe recession will put many of them out on the streets because the people who give them the jobs they need will be laying off or folding and there will be a lot less discretionary income around to pay them for gig economy jobs, too.

So no. I am not excited at the thought that stocks might go seriously "on sale."

No, not excited to lose money. I get excited when I make money. Sometimes I think these type of posts greatly underestimate the potential risk out there. The past down turns and very fast recoveries have spoiled current investors. If you look at what happened in the Great Depression and still get excited then you might want to seek mental help. How about the market could lose 80% and not recover for a decade. Does that make you excited?

One thing I've noticed a lot on several different investing forums is how many older, retired people who give investing advice online have cushy pensions.

I’m older with a pension, but it’s far from cushy (less than $2k per month, no COLA). $2k per month is better than a stick in the eye, but all it would take is a couple of years of aggressive inflation to make it rounding error.

I think, on top of everything else, we’ve gotten complacent on inflation.

Okay, I get it; I won't be political or controversial. The Earth is flat.